Monthly Archives: September 2013

The fringe of experience

A long time ago, I directed a range of fringe theatre productions.

As a training ground for management or innovation, it could not be bettered. Consider what we had to do: select a cast and crew, motivate them around a vision, handle multiple egos under stress, capitalise on a diverse range of talent of every sort, generate and build on new ideas, conduct marketing, PR and sales campaigns and deliver something which we hoped would be wonderful.

And all by a fixed and imminent deadline: first night.

A Brazilian challenge

One production required that we interrogate a reformed murderer in a Brazilian police cell, have a dinner party in a Sao Paulo penthouse, attend a US evangelical revival at a jungle plantation, and have helicopter gunships attack a native village in the Amazonian rainforest.

Did I mention this was fringe theatre? Our vision may have been limitless but our budgets were trivial. And so we struggled as the scale of our vision foundered on the rocks of penury.

A change in perspective

In first weeks of rehearsal, we focused on the script and tried to think of ways of making the production real. But we got nowhere. The cast was frustrated, the crew even more so. People were fractious and unhappy.

First night loomed like an iceberg in the night, getting ever closer.

Then, in a blinding flash of the obvious, everything became much easier.

What was different? We stopped thinking about making the production real.

Instead, we started thinking about the experience which we wanted our customers, the audience, to have. What did we want them to feel? To think? To take away?

Thinking like this, from the audience in, rather than from the production out, unlocked our creativity. Suggestion, not realism, became our driver.

The prison cell became one man lit by a single light in the darkness, shining through bars.

We painted the black interior of the studio theatre – set and auditorium – with foliage and vines like a jungle so that the audience entered the rainforest as soon as they came through the doors.

We placed the dinner party table on a dais in the middle of the stage and lit the background dimly so that the rainforest was only hinted in the shadows.

For the plantation, we lit both the dais and the rainforest, placing it in the jungle.

And we turned the lights of the helicopters onto the audience and played the sound of machine guns with the bass turned up to insane levels so the audience heard gunfire through their ears and felt it through the floor.

Total cost of the set? £200.

We opened on first night with a slick, professional production that was very well received.

Innovating success

Five lessons from my theatre experience have stood me in good stead in business and innovation ever since.

The greatest creativity comes from the greatest constraints.Three things govern all projects: time, cost and performance. If time is fixed and costs are limited, then the only way to achieve breakthrough performance is through creativity and innovation. Having limits drives creativity.

Think from the customer inwards, not from the product outwards.
We only got traction once we started thinking from the audience inwards. Our only arbiter of success is the effect on the customer, not the features of our product. What do we want the customer to think, to feel, to take away? Having these as our goals frees us to be creative.

Recruit for attitude and energy.
We chose people for our production not only for their talent but for their enthusiasm and willingness to try. We only succeeded because all of us – cast, crew and production – contributed to the creative process. As a result we generated many more ideas than we could use, so we could pick the best ones.

Leadership is about trust.
The Director may have a vision for a show, even if s/he does not quite yet know how this vision will be realised. The Director has to trust the cast, crew and production team to come up with good solutions to the many, many unanswered questions with which any production begins. They in turn have to trust the Director to make the right decisions about which ideas will work. And it is only by trusting each other that they find ways to make them work.

Nothing drives creativity more than urgency.
First night is a fixed and unforgiving deadline. Such deadlines offer an imperative focus for a team. Knowing that a deadline is real, and that it matters that the deadline is met, drives the delivery of new ideas better than anything else.

In my experience, when these drivers have been in place, I have only ever seen business innovation projects succeed. Where I have seen innovation failure – or deliver mediocrity, which is worse – one or more of these factors has been missing.

Always.

How about you? If you are innovating for customers, do you recognise these? Let me know what you think.

A new market

Imagine for a moment that we make swords for a living. We need a market for our product. Where are the opportunities? After extensive market research (in our local cinema and some classic books) we find our target customer segment.

Pirates.

A dynamic and exciting market.

Needs? Simple enough: a blade to carry between their teeth as they swing onboard a victim’s ship and something to parry other swords during spectacular duels.

But a standard cutlass already does this job pretty well. If we try to compete just by selling these, then pirates will just choose the cheapest ones. And we can’t compete on price with low-cost blacksmiths working on the Barbary Coast.

We need pirates to see our swords as better than those of our competitors. Do we need to offer a better sword? Perhaps something incorporating the latest technology?

Perhaps a multifunctional sword?

We don’t know.

We need to know what matters to these buccaneers. What are their problems? Their aspirations? How can our swords can help them address these? And how can they do so do so in ways which pirates value and our competitors find hard to copy?

Market insight

So we blow the rest of our market research on more movie tickets and popcorn.

What do we find? Pirates are fundamentally conservative and don’t want radical new sword designs. They don’t want the equivalent of a sword iPad or a swiss army sword.

Other pirates would laugh at them.

Worse, so would their victims.

Is our venture doomed?

Not in the least. For this finding shows us a real customer need that we can meet.

Pirates don’t just want a sword which slashes through the air; they want to look good. A pirate has to look…dashing.

They want others to tell stories about their exploits. Sea voyages, even for pirates, are long, and stories told during endless night watches become legends told in taverns on shore.

And every pirate wants to be a legend.

A unique customer experience

And so we see that our swords have to be special. Sharper than anyone else’s, with blades black as midnight, maybe, with handles encrusted with cabuchons and rubies and trimmed with gold.

Each as unique as its dashing and charismatic owner. Each a sword fit for a legend.

And each sword has to be challenging to get, so that each owner not only gets their sword, but a tale as well.

In short, we need to offer our pirates not only a distinctive product, but a unique customer experience.

So we select our distribution channels very carefully. Caves on obscure islands, perhaps, or at the top of distant mountains. Then we throw in some traps, some quicksand and some fire swamps for good measure.

We prepare to go to market with a below-the-line PR budget to plant rumours of mysterious and wondrous swords in taverns, and above-the-line marketing through publication of obscure and blood-stained treasure maps (strictly limited edition).

And we make sure that the price for each sword is at least a treasure chest full of gold doubloons.

So now we know how we are going to get rich.

A time for thinking of risks

And it is at this point that we begin to think about the risks.

What kinds of risks? Pirates aren’t particularly trustworthy, so we’ll need to make it hard for them to double-cross us. We’ll need the ability to check treasure chests for poison needles among the doubloons. We’ll need good protection for our supply lines.

We will do all these things and more, but we do so knowing that the thing that matters is the customer experience we offer and how it meets their needs.

And while we act to address these risks, we don’t lose sight of what we are in business to do, or what our customers want, or the business model we have designed around meeting the needs of our customers by giving them a unique customer experience.

We think about our customers and how we will do business – and then weseek to manage the risks.

…And this is why banks will never get the customer experience right.

Banks begin with risk

Most businesses succeed by thinking about customers and the opportunities which these customers represent. They look for ways to help customers overcome their problems and achieve their aspirations. They try to align what their businesses do with what their customers want.

When businesses do this well, they become customer-centric businesses; when they do this badly, they find it hard to keep customers and grow.

Most businesses – except banks.

Banks begin, not by understanding customer needs and aspirations, but by considering customers as risks. They begin by assuming that customers will lose the money that banks make available to them, either through fraud or theft or poor money management or bad investment.

So when they consider the services they offer or the customer needs they will meet, banks start by seeking to minimise the risk which their customers pose.

So they make it hard for customers to become customers, because each new customer is a risk. They make it difficult to change between products as changing products carries a risk that something will go wrong.

Where possible, they try to offset such risks, usually through fees or charges. In effect, they ask customers to pay to cover the risk of their own untrustworthiness.

And they love being in the middle of deals as this enables them to offset risk at one end against risk at the other (and doubles their fees).

Bankers are proud of this. Speak to them and they tell you that a bank’s core competency is the quantification and management of risk. A key element of this is customer risk.

And so banks are hard-wired against innovation, because innovation requires both leaps of faith and a willingness to consider new ways of working with customers. These are, by definition, risky.

And, unlike the customer-centric businesses to which we refer to earlier, banks, because of this mindset, cannot align their businesses with their customers; instead they require that customers align their businesses with the bank.

A matter of trust

Banks can’t help being like this.

It’s not their fault.

It’s just that no matter what they do, they can never become customer-centric.

This is the effect of beginning with such risk thinking. It means that banks, unlike every other business, start thinking about what they do from a different first principle:

Do not trust the customer.

This is why, for example, banks find it so hard to offer good customer service when things go wrong. As their business is predicated on pushing risk and liability onto the customer if something has gone wrong, the working assumption is that it is the customer’s fault.

And when things go systemically wrong (LIBOR, PPI, money-laundering, credit card insurance) it is only after huge fines and new laws that banks accept that maybe it was their fault and that the customer might have been right after all. (Although they don’t really believe it).

Banks aren’t bad. (Most) bankers aren’t evil people. They are trying to do the right thing, most of the time.

Pushing uphill

But when your business is designed from the ground up on the assumption that you can’t trust customers, making your business better by aligning yourselves better to customers is going to be difficult.

And so while there are now many people all over the World in banks doing great work to try to make the customer experience better, their prospects for long-term success are limited.

Because no matter what they do, the customer experiences they create can only be an overlay on a business designed not to trust customers.

Any successes they have can only be maintained by rigorous and sustained attention to the customer experience. And when cost-cutting, new regulations, new systems or some other stress hits (as routinely happens in banks), their eye will leave the ball and the fundamental customer attitudes which underpin the banking model will kick back in and all their good progress will inevitably unwind.

Because, under stress, we all revert to the behaviours where we feel most in control and have greatest comfort. For banks, this is thinking about the customer as a source of risk.

A choice of experience

As far as I am concerned, I want to make things better for customers. So, in the main, I think I’d prefer to be in the sword business, selling to pirates.

And, thinking of the customer experience, wasn’t it a pirate who made famous the line: “As you wish*” ? – which is as perfect a customer experience philosophy as is possible in three words.

Yet for the life of me, I can’t think of any famous quotes from bankers about customers at all…